US, China Agree to Delay Tariffs Hike

Christmas appears to have come early to Arris and several other broadband gear vendors that rely on Chinese goods.

US President Donald Trump and China President Xi Jinping agreed Saturday, December 1, to postpone a US plan to jack up tariffs on Chinese goods to 25% -- from the current 10% -- starting January 1, 2019.

The agreement, forged during the Group of 20 summit in Buenos Aires, Argentina, will put that plan on the backburner for 90 days as the US and China try to iron out a longer-term arrangement between the two economic giants.

She added that China will also agree to purchase a "very substantial amount of agricultural, energy, industrial and other product" from the US to, as she put it, "reduce the trade imbalance" between the two countries.

Both sides aim to complete the effort within the next 90 days. If they aren't able to reach a lasting deal at that time, the tariffs will be raised to 25%.

Temporary relief for US vendors
The postponement provides some relief to Arris Group Inc. (Nasdaq: ARRS) and other modem and broadband infrastructure vendors that had already made moves to absorb the current 10% tariffs and were noodling on how to deal with the coming 25% tariffs.

Though there's skepticism that these talks between the US and China will lead to a long-lasting peace on the trade front, Consumer Technology Association president and CEO Gary Shapiro said he is "encouraged" by the decision to put the tariffs increase on ice and is hopeful that there's more progress to come.

"Through September, the tech industry alone paid $349 million more on imported goods from China -- a nearly 200% increase compared to last year -- and more than doubling the ten percent tariff rate would likely hurt consumers, put several American companies out of business and displace thousands of American workers," he said.